FERNANDO ONG, Petitioner, v. THE COURT OF APPEALS and JUDGE P. PURISIMA, Respondents.

G.R. No. L-58476, September 2, 1983124 SCRA 578

FACTS:

Under an agreement between petitioner and Tramat Mercantile, Inc., several units of machineries was obtained and received in trust by petitioner for the purpose of displaying and selling the machineries for cash, under the express obligation on the part of said petitioner of turning over to said Tramat Mercantile, Inc., the proceeds from the sale thereof, if sold, or of returning to the latter the said goods, if not sold, within ninety (90) days, or immediately upon demand.

Petitioner was charged with a criminal case for estafa for allegedly failing to turn over the proceeds of the sale several units of machineries or to return the goods to Tramat Mercantile, Inc.   under the aforesaid covenant.

Petitioner was later charged with a complaint for collection of sum of money with the then CFI of Manila wherein both parties entered a compromise agreement to settle the claim.  Petitioner subsequently filed a motion to dismiss the criminal case against him on the ground of novation because of the compromise agreement entered into between him and the complainant.

CFI of Manila denied the motion to dismiss.  On petition for certiorari with the then Court of Appeals the petition was dismissed on the grounds, among others, that “novation does not extinguish the criminal liability if the crime of estafa has been completed. In the instant case, the crime of estafa had been consummated long before the compromise agreement was agreed upon.  In fact, the criminal case had already been filed in the court.  Therefore, the subsequent agreement did not affect the criminal culpability of the petitioner.” 

Hence, the filing of the instant petition for certiorari, mandamus, prohibition and for a writ of preliminary injunction, with prayer that “the Decision of the respondent Court of Appeals be reversed and set aside; and that respondent judge of the First Instance be prohibited permanently from further proceeding in said criminal case and to command him to dismiss “ said case after due hearing of this petition...”

It is the position of herein petitioner that the compromise agreement in the civil case novated the contract embodied in the trust receipts on which the information in the Criminal Case No.43423 was based, “inasmuch as there was a change of object or principal conditions, under Article 1291 of the Civil Code.  There being a novation, it is respectfully submitted that even if the novation took place after the filing of the Information in the criminal case, the transaction had nonetheless been converted from a criminal violation to civil obligation, which would therefore necessitate the consequent dismissal of the criminal case.”

ISSUE: 

Whether or not the compromise agreement made after the filing of the criminal case novated the trust receipt agreement?

HELD:

No, after the information is filed in court, compromise for estafa case arising from violation of the Trust Receipts Law will not amount to novation and will not extinguish the criminal liability of the accused.

“The novation theory may perhaps apply to the filing of the criminal information in court by the state prosecutors because up to that time the original trust relation may be converted by the parties into an ordinary creditor-debtor situation, thereby placing the complainant in estoppel to insist on the original trust.  But after the justice authorities have taken cognizance of the crime and instituted action in court, the offended party may no longer divest the prosecution of its power to exact criminal liability, as distinguished from the civil.  The crime being an offense against the state, only the latter can renounce it.

“It may be observed in this regard that novation is not one of the means recognized by the ,Penal Code whereby criminal liability can be extinguished; hence the role of novation may be either to prevent the rise of criminal liability or to cast doubt on the true nature of the original basic transaction, whether or not it was such that its breach would not give rise to penal responsibility, as when money loaned is made to appear as a deposit, or other similar disguise is resorted to.

Thus it is clear that the respondent Court of Appeals did not abuse its discretion amounting to lack of jurisdiction in denying petitioner’s motion to dismiss the criminal case of estafa on the basis of a compromise agreement made after the filing of the information.

ACCORDINGLY, the petition is DISMISSED for lack of merit.